8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)       April 3, 2008     

RPM INTERNATIONAL INC.

(Exact name of registrant as specified in its charter)

Delaware	1-14187	02-0642224
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

2628 Pearl Road, P.O. Box 777, Medina, Ohio	44258
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:       (330) 273-5090     

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On April 3, 2008, the Company issued a press release announcing its third quarter results, which provided detail not included in previously issued reports. A copy of the press release is furnished with this Current Report on Form 8-K as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits.

     (d) Exhibits.

Exhibit Number	Description
99.1	Press release of the Company, dated April 3, 2008, announcing the Company’s third quarter results.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	RPM International Inc. (Registrant)
Date April 3, 2008	/s/ Ernest Thomas
	Ernest Thomas
	Senior Vice President and Chief Financial Officer

Exhibit Index

Exhibit Number	Description
99.1	Press release of the Company, dated April 3, 2008, announcing the Company’s third quarter results.

EX-99.1

Exhibit 99.1

RPM Reports Record Sales and Net Income for Fiscal 2008 Third Quarter, Nine Months

• Net income grew 21% on 8% sales increase

• Growth continued in both industrial and consumer segments in challenging economy

• Guidance revised upward to 10-12% sales and earnings growth for fiscal 2008

MEDINA, Ohio — April 3 — RPM International Inc. (NYSE: RPM) today reported record fiscal third-quarter sales, net income and diluted earnings per share for the quarter ended February 29, 2008. Sales and earnings momentum in the company’s larger industrial segment continued, while consumer segment sales and earnings increased significantly over the third quarter a year ago.

Third-Quarter Results

RPM’s net sales of $731.8 million were up 7.7% from the $679.5 million reported in the fiscal 2007 third quarter. Organic sales growth accounted for 7.1% of the increase, with 3.2% of that amount representing net foreign exchange gains. Net acquisition growth was 0.6% of the 7.7% total growth in net sales.

Net income for the quarter increased 20.9% to $12.2 million, compared to $10.1 million a year ago, while diluted earnings per share increased 25.0% to $0.10, compared to $0.08 in the year-ago third quarter.

The effective tax rate for this quarter was 22.2% compared to a tax rate of 11.6% in the prior year. The higher effective income tax rate in the current period is primarily due to the absence of a one-time benefit reflected in the third quarter of last year.

“RPM’s third-quarter operating results reflected continued robust industrial demand, particularly in European, Canadian and Latin American markets,” stated Frank C. Sullivan, president and chief executive officer. “Despite the tough U.S. housing market and domestic economy, our consumer segment performed well, as we benefited from prior-year acquisitions, along with the introduction of new, higher-end products, which drove market share gains at major retail accounts,” he stated.

Consolidated earnings before interest and taxes (EBIT) reached $25.1 million, an 11.4% improvement over the $22.5 million reported a year ago.

Third-Quarter Segment Sales and Earnings

The company’s industrial segment posted a 9.7% sales increase to $467.1 million from $425.7 million in the year-ago third quarter. Organic sales increased 7.5%, of which 4.1% resulted from net foreign exchange gains. Acquisitions accounted for the remaining 2.2% of the increase in total revenues for the period. Industrial segment EBIT for the third quarter was essentially flat at $18.0 million for the quarter compared to $18.1 million last year. Revenue growth outpaced earnings in the current period due to the EBIT impact of the settlement of a lawsuit by one of RPM’s subsidiaries.

“Industrial segment sales growth was led by industrial and commercial flooring, industrial coatings and most international operations,” stated Sullivan. “Much of this growth resulted from ongoing industrial and commercial maintenance and improvement activities. There was also a slight increase in new

RPM Reports Record Sales and Net Income for Fiscal 2008 Third Quarter, Nine Months
April 3, 2008
Page 2 of 4

construction abroad in our principal markets, which contributed to increased revenues in the current period. In order to offset overall economic weakness, which is beginning to impact certain sectors of our domestic construction markets, we will continue to secure new business through our strong brand offerings, coupled with international expansion and high value-added product innovations that enhance performance,” Sullivan stated.

Sales by RPM’s consumer segment increased 4.3% to $264.7 million from $253.8 million a year ago. Of the growth in sales, 6.3% was organic, including 1.7% in net foreign exchange gains. Offsetting the organic growth in this segment was the impact of the divestiture of the company’s Bondo subsidiary last quarter. Segment EBIT grew 17.6% to $19.8 million from $16.9 million in the fiscal 2007 third quarter.

“Sales of small project paints and primer-sealers were up significantly during the quarter, offset partially by relatively slower sales of caulks and sealants, which are more dependent on new housing construction in the U.S.,” Sullivan stated. “By effectively leveraging this continued growth in sales and combining that leverage with additional productivity improvements, the consumer segment produced considerable growth in EBIT over the 2007 third-quarter performance. Additionally, we continue to benefit from the stable growth supplied by our various repair and maintenance products.”

Asbestos Update

During the quarter, RPM paid $18.7 million in pre-tax asbestos-related indemnity and defense costs, compared to payments of $18.2 million made during last year’s third fiscal quarter. The total asbestos liability balance stood at $286.7 million at February 29, 2008.

$250 Million, Ten-Year Note Offering

As previously announced on February 14, 2008, RPM sold $250 million of 6.50% Notes due 2018. Proceeds were used to repay, redeem or refinance $100 million in principal amount of the company’s unsecured, senior notes due March 1, 2008, $125 million in principal amount outstanding under RPM’s accounts receivable securitization program and $19 million in principal amount of short-term borrowings outstanding under the company’s revolving credit facility. “We are pleased with the impact of this new financing on our liquidity and the maturity schedule of our outstanding debt. This timely refinancing further strengthens our balance sheet, which is especially important given the unsettled state of the economy. Furthermore, this transaction provides additional liquidity to drive organic growth and support our solid pipeline of acquisition opportunities,” stated Sullivan.

Nine-Month Sales and Earnings

Sales, net income and earnings per share were all records for the fiscal nine-month period ended February 29, 2008.

RPM’s net sales for the first nine months of fiscal 2008 were up 10.1%, to $2.6 billion from $2.3 billion a year ago. Organic sales growth was 7.9%, including 2.9% in net foreign exchange gains, while net acquisitions accounted for 2.2% of the total increase in net sales. Net income for the first nine months was $135.3 million, up 8.8% from the $124.3 million reported in the comparable period of fiscal 2007. Diluted earnings per share for the period increased 7.1%, to $1.06 from $0.99 a year ago.

RPM Reports Record Sales and Net Income for Fiscal 2008 Third Quarter, Nine Months
April 3, 2008
Page 3 of 4

The first nine months of fiscal 2007 included a $15.0 million, pre-tax gain from the settlement of asbestos-related claims against an insurance carrier. Excluding this gain, net income for the first nine months of fiscal 2008 increased 18.0% on a pro forma basis, from $114.6 million in fiscal 2007, and diluted earnings per share improved 16.5% on a pro forma basis, from $0.91 during the same period.

Nine-month EBIT was $231.0 million, up 4.3% from the $221.4 million reported a year ago. Excluding the 2007 asbestos-related gain, EBIT increased 11.9% on a pro forma basis, from $206.4 million last year.

RPM’s industrial segment sales grew 12.1% in the first nine months of fiscal 2008, to $1.7 billion from $1.5 billion a year ago. Eight small acquisitions represented 2.3% of this growth, with organic growth adding 9.8%, of which 3.7% was from foreign exchange gains. Industrial segment EBIT increased 10.1%, to $172.3 million, from $156.4 million registered in the first nine months of fiscal 2007.

Nine-month sales for the consumer segment were $887.7 million, a 6.5% increase from the $833.6 million reported in the same period of fiscal 2007. Organic sales increased by 4.5%, including a foreign exchange gain of 1.6%, while product line acquisitions contributed 2.0%. Consumer segment EBIT increased by 9.7%, to $94.5 million in fiscal 2007 from $86.2 million in the prior fiscal year.

Cash Flow and Financial Position

For the first nine months of fiscal 2008, cash flow from operations was $161.8 million, up 20.9% from $133.8 million a year ago. Capital expenditures were $29.8 million, compared to depreciation of $46.2 million over the same period. Total debt at the end of February 2008 was $1.1 billion, compared to $988.1 million at the end of fiscal 2007, with most of the increase due to acquisition funding and the new issuance of notes. The company’s net (of cash) debt-to-total capitalization ratio was 37.7%, compared to 43.3% at May 31, 2007.

Total cash and short-term investments were $391.0 million at the end of February, and the company had $429.2 million available under its credit facilities for total liquidity of $820.2 million at February 29, 2008. In early March, the company repaid $100.0 million in senior, unsecured Notes due March 1, 2008.

Euclid Chemical and Tremco Close Acquisitions

Subsequent to the end of the third quarter, RPM announced two acquisitions. On March 5, 2008, the company’s Tremco illbruck subsidiary purchased Prosytec SAS, a $39 million provider of sealants for the construction and window assembly markets in Southern and Eastern Europe. Additionally, on March 11, RPM’s Euclid Chemical subsidiary acquired Increte Systems, Inc. With sales of $15 million, Increte is the nation’s leading manufacturer of decorative concrete systems. Both acquisitions are expected to be accretive to earnings within one year.

Business Outlook

“Given our strong results for the quarter and first nine months of the year, we are comfortable increasing our previous guidance of 8-10% growth in sales and earnings to 10-12% growth in both metrics for this fiscal year. As we complete the final quarter of our fiscal year and move into the planning process for fiscal 2009, we will continue to closely monitor overall economic conditions and

RPM Reports Record Sales and Net Income for Fiscal 2008 Third Quarter, Nine Months
April 3, 2008
Page 4 of 4

will be especially focused on domestic construction markets. Consistent with prior years, we will issue guidance for fiscal 2009 when our year-end results are announced in July,” stated Sullivan.

Webcast and Conference Call Information

Management will host a conference call to further discuss these results beginning at 10:00 a.m. EDT today. The call can be accessed by dialing 866-270-6057 or 617-213-8891 for international callers. Participants are asked to call the assigned number approximately 10 minutes before the conference call begins. The call, which will last approximately one hour, will be open to the public, but only financial analysts will be permitted to ask questions. The media and all other participants will be in a listen-only mode.

For those unable to listen to the live call, a replay will be available from approximately 12:00 p.m. EDT on April 3 until 11:59 p.m. EDT on April 10, 2008. The replay can be accessed by dialing 888-286-8010 or 617-801-6888 for international callers. The access code is 97516494. The call also will be available both live and for replay, and as a written transcript, via the Internet on the RPM web site at www.rpminc.com.

About RPM

RPM International Inc., a holding company, owns subsidiaries that are world leaders in specialty coatings and sealants serving both industrial and consumer markets. RPM’s industrial products include roofing systems, sealants, corrosion control coatings, flooring coatings and specialty chemicals. Industrial brands include Stonhard, Tremco, illbruck, Carboline, Day-Glo, Euco and Dryvit. RPM’s consumer products are used by professionals and do-it- yourselfers for home maintenance and improvement, boat repair and maintenance, and by hobbyists. Consumer brands include Zinsser, Rust- Oleum, DAP, Varathane and Testors.

For more information, contact P. Kelly Tompkins, executive vice president and chief administrative officer at 330-273-5090 or ktompkins@rpminc.com.

This press release contains “forward-looking statements” relating to the business of the company. These forward-looking statements, or other statements made by the company, are made based on management’s expectations and beliefs concerning future events impacting the company and are subject to uncertainties and factors (including those specified below) which are difficult to predict and, in many instances, are beyond the control of the company. As a result, actual results of the company could differ materially from those expressed in or implied by any such forward-looking statements. These uncertainties and factors include (a) general economic conditions; (b) the prices and availability of raw materials, including assorted resins and solvents; packaging, including plastic containers; and transportation services, including fuel surcharges; (c) continued growth in demand for our products; (d) legal, environmental and litigation risks inherent in our construction and chemicals businesses and risks related to the adequacy of our insurance coverage for such matters; (e) the effect of changes in interest rates; (f) the effect of fluctuations in currency exchange rates upon our foreign operations; (g) the effect of non-currency risks of investing in and conducting operations in foreign countries, including those relating to domestic and international political, social, economic and regulatory factors; (h) risks and uncertainties associated with our ongoing acquisition and divestiture activities; (i) risks related to the adequacy of our contingent liabilities, including for existing and future asbestos-related claims; and (j) other risks detailed in our filings with the Securities and Exchange Commission, including the risk factors set forth in our Annual Report on Form 10-K for the year ended May 31, 2007, as the same may be updated from time to time. RPM does not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise after the date of this release.

###

CONSOLIDATED STATEMENTS OF INCOME
IN THOUSANDS, EXCEPT PER SHARE DATA
(UNAUDITED)

	AS REPORTED									ADJUSTED (a)
	Three Months Ended				Nine Months Ended					Three Months Ended				Nine Months Ended
	February 29,		February 28,		February 29,		February 28,			February 29,		February 28,		February 29,		February 28,
	2008		2007		2008		2007			2008		2007		2008		2007
Net Sales	$	731,773	$	679,494	$	2,567,820	$	2,333,041		$	731,773	$	679,494	$	2,567,820	$	2,333,041
Cost of sales		440,528		416,009		1,524,935		1,398,412			440,528		416,009		1,524,935		1,398,412
Gross profit		291,245		263,485		1,042,885		934,629			291,245		263,485		1,042,885		934,629
Selling, general & administrative expenses		266,160		240,964		811,913		728,264			266,160		240,964		811,913		728,264
Asbestos-related settlement (income)								(15,000	)
Interest expense, net		9,462		11,146		34,287		35,664			9,462		11,146		34,287		35,664
Income before income taxes		15,623		11,375		196,685		185,701			15,623		11,375		196,685		170,701
Provision for income taxes		3,473		1,323		61,412		61,367			3,473		1,156		61,412		56,082
Net Income	$	12,150	$	10,052	$	135,273	$	124,334		$	12,150	$	10,219	$	135,273	$	114,619
Basic earnings per share of common stock	$	0.10	$	0.08	$	1.13	$	1.06		$	0.10	$	0.09	$	1.13	$	0.97
Diluted earnings per share of common stock	$	0.10	$	0.08	$	1.06	$	0.99		$	0.10	$	0.08	$	1.06	$	0.91
Average shares of common stock outstanding — basic		120,091		118,430		120,077		117,817			120,091		118,430		120,077		117,817
Average shares of common stock outstanding — diluted		130,223		120,967		130,408		128,371			130,223		120,967		130,408		128,371

(a) Adjusted figures presented remove the impact of the asbestos-related settlement (income) recorded during the quarter ended November 30, 2006.

SUPPLEMENTAL SEGMENT INFORMATION
IN THOUSANDS
(UNAUDITED)

	AS REPORTED												ADJUSTED (a)
	Three Months Ended						Nine Months Ended						Three Months Ended						Nine Months Ended
	February 29,			February 28,			February 29,			February 28,			February 29,			February 28,			February 29,			February 28,
	2008			2007			2008			2007			2008			2007			2008			2007
Net Sales:
Industrial Segment	$	467,060		$	425,655		$	1,680,170		$	1,499,478		$	467,060		$	425,655		$	1,680,170		$	1,499,478
Consumer Segment		264,713			253,839			887,650			833,563			264,713			253,839			887,650			833,563
Total	$	731,773		$	679,494		$	2,567,820		$	2,333,041		$	731,773		$	679,494		$	2,567,820		$	2,333,041
Income (Loss) Before Income Taxes (b):
Industrial Segment Income Before Income         Taxes (b)	$	17,729		$	17,936		$	170,293		$	156,131		$	17,729		$	17,936		$	170,293		$	156,131
Interest (Expense), Net		(315	)		(167	)		(1,980	)		(276	)		(315	)		(167	)		(1,980	)		(276	)
EBIT (c)	$	18,044		$	18,103		$	172,273		$	156,407		$	18,044		$	18,103		$	172,273		$	156,407
Consumer Segment Income Before Income         Taxes (b)	$	18,992		$	16,010		$	91,808		$	83,881		$	18,992		$	16,010		$	91,808		$	83,881
Interest (Expense), Net		(852	)		(871	)		(2,694	)		(2,271	)		(852	)		(871	)		(2,694	)		(2,271	)
EBIT (c)	$	19,844		$	16,881		$	94,502		$	86,152		$	19,844		$	16,881		$	94,502		$	86,152
Corporate/Other (Expense) Before Income         Taxes (b)	$	(21,098	)	$	(22,571	)	$	(65,416	)	$	(54,311	)	$	(21,098	)	$	(22,571	)	$	(65,416	)	$	(69,311	)
Interest (Expense), Net		(8,295	)		(10,108	)		(29,613	)		(33,117	)		(8,295	)		(10,108	)		(29,613	)		(33,117	)
EBIT (c)	$	(12,803	)	$	(12,463	)	$	(35,803	)	$	(21,194	)	$	(12,803	)	$	(12,463	)	$	(35,803	)	$	(36,194	)
Consolidated
Income Before Income Taxes (b)	$	15,623		$	11,375		$	196,685		$	185,701		$	15,623		$	11,375		$	196,685		$	170,701
Interest (Expense), Net		(9,462	)		(11,146	)		(34,287	)		(35,664	)		(9,462	)		(11,146	)		(34,287	)		(35,664	)
EBIT (c)	$	25,085		$	22,521		$	230,972		$	221,365		$	25,085		$	22,521		$	230,972		$	206,365

(a)	Adjusted figures presented remove the impact of the asbestos-related settlement (income) recorded during the quarter ended November 30, 2006.
(b)	The presentation includes a reconciliation of Income (Loss) Before Income Taxes, a measure defined by Generally Accepted Accounting Principles (GAAP) in the United States, to EBIT.
(c)	EBIT is defined as earnings (loss) before interest and taxes. We evaluate the profit performance of our segments based on income before income taxes, but also look to EBIT as a performance evaluation measure because interest expense is essentially related to corporate acquisitions, as opposed to segment operations. We believe EBIT is useful to investors for this purpose as well, using EBIT as a metric in their investment decisions. EBIT should not be considered an alternative to, or more meaningful than, operating income as determined in accordance with GAAP, since EBIT omits the impact of interest and taxes in determining operating performance, which represent items necessary to our continued operations, given our level of indebtedness and ongoing tax obligations. Nonetheless, EBIT is a key measure expected by and useful to our fixed income investors, rating agencies and the banking community all of whom believe, and we concur, that this measure is critical to the capital markets’ analysis of our segments’ core operating performance. We also evaluate EBIT because it is clear that movements in EBIT impact our ability to attract financing. Our underwriters and bankers consistently require inclusion of this measure in offering memoranda in conjunction with any debt underwriting or bank financing. EBIT may not be indicative of our historical operating results, nor is it meant to be predictive of potential future results.

CONSOLIDATED BALANCE SHEETS

IN THOUSANDS
	February 29, 2008			February 28, 2007			May 31, 2007
Assets	(Unaudited)			(Unaudited)
Current Assets
Cash and short-term investments	$	390,962		$	137,697		$	159,016
Trade accounts receivable		576,097			501,726			763,426
Allowance for doubtful accounts		(21,154	)		(19,810	)		(19,167	)
Net trade accounts receivable		554,943			481,916			744,259
Inventories		485,302			453,285			437,759
Deferred income taxes		41,084			56,286			39,276
Prepaid expenses and other current assets		206,206			192,579			189,939
Total current assets		1,678,497			1,321,763			1,570,249
Property, Plant and Equipment, at Cost		993,290			909,844			963,200
Allowance for depreciation and amortization		(534,364	)		(471,341	)		(489,904	)
Property, plant and equipment, net		458,926			438,503			473,296
Other Assets
Goodwill		854,980			792,854			830,177
Other intangible assets, net of amortization		347,330			341,186			353,420
Other		94,119			101,127			106,007
Total other assets		1,296,429			1,235,167			1,289,604
Total Assets	$	3,433,852		$	2,995,433		$	3,333,149
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable	$	280,195		$	250,775		$	385,003
Current portion of long-term debt		101,579			3,514			101,641
Accrued compensation and benefits		120,055			112,127			132,555
Accrued loss reserves		72,731			68,434			73,178
Asbestos-related liabilities		57,500			57,925			53,000
Other accrued liabilities		112,333			106,374			119,363
Total current liabilities		744,393			599,149			864,740
Long-Term Liabilities
Long-term debt, less current maturities		1,031,740			933,027			886,416
Asbestos-related liabilities		229,173			314,935			301,268
Other long-term liabilities		165,621			102,215			175,958
Deferred income taxes		36,095			16,714			17,897
Total long-term liabilities		1,462,629			1,366,891			1,381,539
Total liabilities		2,207,022			1,966,040			2,246,279
Stockholders’ Equity
Preferred stock; none issued Common stock (outstanding 121,819; 120,772; 120,906)		1,218			1,208			1,209
Paid-in capital		600,126			574,932			584,845
Treasury stock, at cost		(5,940	)
Accumulated other comprehensive income		92,903			40,375			25,140
Retained earnings		538,523			412,878			475,676
Total stockholders’ equity		1,226,830			1,029,393			1,086,870
Total Liabilities and Stockholders’ Equity	$	3,433,852		$	2,995,433		$	3,333,149

CONSOLIDATED STATEMENTS OF CASH FLOWS

IN THOUSANDS	Nine Months Ended
(UNAUDITED)	February 29,			February 28,
	2008			2007
Cash Flows From Operating Activities
Net income	$	135,273		$	124,334
Depreciation and amortization		62,402			59,046
Items not affecting cash and other		26,173			(4,975	)
Changes in operating working capital		(18,656	)		(13,575	)
Changes in asbestos-related liabilities, net of tax		(43,412	)		(30,991	)
		161,780			133,839
Cash Flows From Investing Activities
Capital expenditures		(29,825	)		(34,111	)
Acquisition of businesses, net of cash acquired		(13,995	)		(75,018	)
Purchases of marketable securities		(74,696	)		(69,539	)
Proceeds from the sale of marketable securities		66,422			52,026
Proceeds from the sale of assets		44,800
Other		(1,472	)		1,158
		(8,766	)		(125,484	)
Cash Flows From Financing Activities
Additions to long-term and short-term debt		130,288			308,375
Reductions of long-term and short-term debt		(2,715	)		(252,833	)
Cash dividends		(67,467	)		(60,949	)
Exercise of stock options, including tax benefit		6,086			23,933
Repurchase of stock		(5,940	)
		60,252			18,526
Effect of Exchange Rate Changes on Cash and Short-Term Investments		18,680			2,200
Increase in Cash and Short-Term Investments	$	231,946		$	29,081